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Hong Kong developers and banks offering cash rebates and discounts to homebuyers

Hong Kong developers and banks offering cash rebates and discounts to homebuyers

They are being offered just a week after the rise of mortgage rates in the city, in the latest sign that the city’s red hot housing market is cooling down

BOC Hong Kong (Holdings) and CMB Wing Lung Bank are offering rebates of up to 2% of the loan value for new-home mortgages, reported the Hong Kong Economic Times, citing unidentified sources.

The newspaper also said that Citigroup is said to have lowered the cap for its Hibor-linked mortgage rate by 10 basis points.

Hong Kong is one of the world’s most expensive places to buy a home, which has been fueled by the ultra-low rates that had helped fuel the city’s property boom. This move heralded the end of that trend, as lenders in the city last week raised their best lending rates for the first time in more than 12 years.

Developers have continued to offer perks to attract buyers. Lai Sun Development Co. cut the price of some units at its Monti project by 10% last week, and has given buyers furniture vouchers worth as much as $21,120.

Vanke Property (Hong Kong), the local arm of China Vanke, is now offering buyers at its Le Pont development in the ‘New Territories’ mortgages between 10 and 20 basis points—both below market rates, and cash rebates of as much as 1.95% of the mortgage amount. Rising interest rates and increasing supple over the next two years have also prompted developers to speed up their sales ahead of a vacancy tax that is all set to penalize firms for holding onto empty apartments.

Thomas Lam, executive director at Knight Frank stated: “The cooling measures carried out by the government earlier this year have heightened the cost of keeping inventory for developers, so they need this kind of marketing campaign to attract buyers.”

The country’s property market is already showing signs of slowing after prices more than quadrupled since 2003.

The number of transactions in the secondary market slumped to 32% in September from the previous month to a 30-month low, according to Centaline Property Agency. New-home transactions fell 16% last month.

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